MP gets USD 350 mn loan from ADB to improve power supply
Updated: Feb 18, 2014 06:01:54pm
Bhopal, Feb 18 (KNN) In order to bridge the demand supply gap in power supply in the state, the Government of India and Asian Development Bank (ADB) have signed here a USD 350 million loan for selective transmission and distribution system improvements critical for meeting the growing demand of power in Madhya Pradesh.
“The project will carry-out physical upgrades to increase capacity and deliver power more efficiently,” said an official statement.
It will fund about 1,800 circuit kilometres of transmission lines and more than 3,100 circuit kilometres of distribution lines, as well as building or upgrading transmission and distribution substations.
Madhya Pradesh, whose economy is growing at a quicker rate than the national average, is expected to see its demand for electricity rise by about 11 per cent a year between fiscal years 2013 and 2017, resulting in a potential transmission and distribution capacity gap of about 20 per cent.
“The mismatch between supply and demand has caused regular load shedding in the past, and currently only about two-thirds of all households are connected to the system,” the statement added.
Training and other support will be given to staff of the Madhya Pradesh Power Transmission Company, as well as three state distribution companies, to strengthen their management capabilities and to make the companies more financially sustainable and service oriented, the statement added.
The project will build on previous ADB investments in the state’s power sector ― including transmission and distribution assets ― totalling more than USD 1.3 billion since 2001. Along with ADB’s loan from ordinary capital resources, the Government of India will provide USD 150 million for a total investment cost of USD 500 million. The project will run for about four and a half years with an estimated completion date of December 2018, said the statement.
The loan from the ordinary capital resources of ADB has a 25-year term including a grace period of 5 years, commitment charge of 0.15 per cent per year (on un-drawn balance), Maturity Premium of 0.10 per cent (by straight line method) and interest rate to be determined in accordance with ADB’s LIBOR-based lending facility.
Speaking on the occasion, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, Nilaya Mitash said that the loan will help improve reliability of electricity supply in Madhya Pradesh and boost efforts to provide good quality power 24 hours a day.
Country Director for ADB M Teresa Kho said that despite impressive network gains in recent years, demand for power in Madhya Pradesh is outstripping supply, and the quality and reliability of electricity – especially in rural areas – needs further improvements. She further said that the project will help increase capacity and operational efficiency in the electricity transmission and distribution system in Madhya Pradesh. (KNN/SD)
“The project will carry-out physical upgrades to increase capacity and deliver power more efficiently,” said an official statement.
It will fund about 1,800 circuit kilometres of transmission lines and more than 3,100 circuit kilometres of distribution lines, as well as building or upgrading transmission and distribution substations.
Madhya Pradesh, whose economy is growing at a quicker rate than the national average, is expected to see its demand for electricity rise by about 11 per cent a year between fiscal years 2013 and 2017, resulting in a potential transmission and distribution capacity gap of about 20 per cent.
“The mismatch between supply and demand has caused regular load shedding in the past, and currently only about two-thirds of all households are connected to the system,” the statement added.
Training and other support will be given to staff of the Madhya Pradesh Power Transmission Company, as well as three state distribution companies, to strengthen their management capabilities and to make the companies more financially sustainable and service oriented, the statement added.
The project will build on previous ADB investments in the state’s power sector ― including transmission and distribution assets ― totalling more than USD 1.3 billion since 2001. Along with ADB’s loan from ordinary capital resources, the Government of India will provide USD 150 million for a total investment cost of USD 500 million. The project will run for about four and a half years with an estimated completion date of December 2018, said the statement.
The loan from the ordinary capital resources of ADB has a 25-year term including a grace period of 5 years, commitment charge of 0.15 per cent per year (on un-drawn balance), Maturity Premium of 0.10 per cent (by straight line method) and interest rate to be determined in accordance with ADB’s LIBOR-based lending facility.
Speaking on the occasion, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, Nilaya Mitash said that the loan will help improve reliability of electricity supply in Madhya Pradesh and boost efforts to provide good quality power 24 hours a day.
Country Director for ADB M Teresa Kho said that despite impressive network gains in recent years, demand for power in Madhya Pradesh is outstripping supply, and the quality and reliability of electricity – especially in rural areas – needs further improvements. She further said that the project will help increase capacity and operational efficiency in the electricity transmission and distribution system in Madhya Pradesh. (KNN/SD)
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